30.9.16

REVEALED: Jonathan Resisted Pressure To Sell Nigeria’s Stake In NLNG

This is not the first time private
sector players have put pressure on the federal government to sell off
all or part of its 49% stake in Nigeria Liquefied Natural Gas, NLNG,
Ltd.

NLGN Ltd was incorporated in 1989, with
the shareholders being NNPC (representing the Federal Government of
Nigeria) owning 49% equity, Shell Gas BV 25.6%, Total LNG Nigeria
Ltd 15% and ENI International 10.4%.

A former aide to ex-President Goodluck Jonathan told TheCable that in May 2014, a group of unnamed Nigerian businessmen made a similar proposal.

Jonathan minuted on the proposal to Nwanze Okidegbe, his chief economic adviser, asking for “comments and advice”.

TheCable learnt that the office of the chief economic adviser was not well disposed to the idea.

“We understand that Okidegbe’s office
initially wrote a memo completely opposing the sale, listing all the
benefits the federation was enjoying and explaining why it was not in
the national interest,” the former aide told TheCable.

However, intense pressure was mounted on
the chief economic adviser who eventually shifted ground and
recommended that federal government should sell just between 9% and 10%
of its stake.

This would have left the government with
40% – a proposal that has now been revived under President Muhammadu
Buhari as the nation faces forex crunch and liquidity issues.

“Jonathan got the response in May 2014,
but he did not act on it for reasons nobody could really say. It could
be that he was not convinced of any urgency or that the politics of
re-election became priority,” the source said.

Another source, however, said the
proposal failed because the Jonathan administration was advised that
under the NLNG agreement, the other shareholders must be offered the
first right to buy Nigeria’s stake.

“It became complicated. The businessmen
who proposed the idea wanted to buy the shares and it soon became
glaring that Shell and co. would certainly take up the first option,
meaning nothing for the people behind the idea,” the source, who was a
senior member of Jonathan’s administration, told TheCable.

According to statistics provided by NLNG
Ltd, its total revenue from 1999 to 2015 was $90.3 billion from
a capital investment of $15.6 billion.

NNPC, on behalf of Nigeria, received dividends of $15.3 billion during the period, while other shareholders earned $16 billion.

There has been an uproar on the revival
of the sale proposal, with many commentators maintaining that Nigeria
has no justification to sell what is working well.

But others believe since the country
needs an injection of forex into the economy following a sharp drop in
oil revenue, it should not foreclose other options.